The regulations would cover payday loans, auto title loans and other high-interests loans.

"Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt," said CFPB Director Richard Cordray. "By putting in place mainstream, common-sense lending standards, our proposal would prevent lenders from succeeding by setting up borrowers to fail."

Among the proposed requirements is one that lenders would be required to determine if a borrower would be able to afford to repay the loan and all fees while still meeting basic living expenses and major financial obligations. The so-called "full-payment" test would replace existing qualifiers such as having a check account or source of income.

The proposal would also include placing a cap on the number of short-term loans that can be made in quick succession.

The CFPB research showed that median fee on a payday loan is $15 per $100 borrowed with a median loan term of 14 days, resulting in an annual percentage rate of 391 percent on a loan with a median amount of $350. Those fees generated $3.6 billion in fee revenue in 2015 for the estimated 15,766 payday loan stores across the U.S.

Lenders would still have the option to loan up to $500 to consumers without a full-payment test but only to consumers without any outstanding short-term loans. Long-term loans would also be available but the interest rate would be capped at 28 percent and the application fee could be no more than $20.

The proposal would also require lenders to notify consumers before drafting money from an account and, after two failed attempts, to receive new authorization from the borrower. The rule is designed to limit the number of overdraft charges associated with loan payment attempts.

The bureau is accepting comments on the proposed rule until Sept. 14. Those comments will be reviewed before final regulations are issued.